I like the latter way better too, fadedc. It's fun to be able to tweak your character every level or so, rather than doing everything at the beginning and then having very little or no customization later. D&D handled this better later, with multi-classing, prestige classes, etc. The original Fallout was great in this regard; so that would be an old game that really set the bar for all the new games that followed.

I'm very glad that TES has stolen perks from Fallout and added them to their series. It could really breathe new life into the franchise.